A Supreme Court of Canada ruling has implications for the trade dispute between Alberta and BC over the Kinder Morgan pipeline expansion.

Last week, a decision was reached in the case R v Comeau which opens the door for the BC government to continue its opposition to the Kinder Morgan pipeline.

The Supreme Court of Canada ruled to uphold a $240 fine against Gerard Comeau issued six years ago after he brought alcohol from Quebec into his home province of New Brunswick.

Mr Comeau appealed against the fine. He contended that s. 121 of the Constitution prevented New Brunswick from not allowing its residents to stock up on alcohol from another province. The Section states: “All Articles of the Growth, Produce, or Manufacture of any one of the Provinces shall, from and after the Union, be admitted free into each of the other Provinces.”

The Court ultimately did not agree with his interpretation. It found that the phrase “admitted free” did not amount to a guarantee of free trade between provinces but rather was intended to way to prevent provincial legislatures from setting up trade restrictions against one another over a dispute. Passing laws that have an “incidental” effect on the passage of goods over interprovincial borders should be permitted, however, so long as their purpose is to achieve other goals within their powers.

This case, which started over 14 cases of beer and three bottles of spirits, will have wide-ranging consequences on interprovincial trade across the country. It is also very significant to the bitter trade war between Alberta and BC.

Implications for Alberta and Federal governments

Alberta and the Federal Government are taking the position that BC is unfairly opposing the Kinder Morgan pipeline expansion. Alberta has been threatening to restrict oil and fuel shipments to BC and it previously banned wine imports from BC. Both were punitive trade barriers designed to pressure BC to drop its opposition to the pipeline.

The Supreme Court of Canada’s ruling would render such actions as unconstitutional as it would go against the Court’s interpretation of s. 121 being a measure to prevent trade barriers from being established by quarrelling states.

This effectively paves the way for BC to continue its opposition to the pipeline without the threat of economic sanctions hanging over its head.

A victory for provincial rights over federal rights?

The Supreme Court of Canada found that if provinces have a legitimate reason related to a provincial purpose, they have the right to protect that purpose, even if it conflicts with federal law. In R v Comeau, the Court found New Brunswick’s right to protect the amount of alcohol coming into the Province trumped the federal free trade law enshrined in the constitution.

Provinces have a very broad power being recognized here by the Supreme Court of Canada to create legislation that relates to issues within their province and this is not the first time the Supreme Court has favoured the rights of provinces over Federal laws. In Goodwin v British Columbia a driver who was appealing against an immediate roadside prohibition (IRP) submitted that the IRP scheme overstepped the bounds of provincial legislative rights and invaded the federal government’s jurisdiction over criminal law.

The appeal was unsuccessful, however, because The Supreme Court of Canada found the scheme was pursuing a provincial purpose, namely preventing death and injury on public roads, and its purpose was not to oust federal administration of criminal law.

This case and R v Comeau send very clear indications that when conflicts arise between provincial and federal laws, the Supreme Court of Canada is more supportive of the former camp, so long as those laws are made for a specific provincial purpose.

It also sends a clear message to Alberta Premier Rachel Notley and Prime Minister Justin Trudeau to beware imposing future punitive trade barriers should the pipeline dispute get even uglier.